Trump didn’t know the GOP tax bill incentivizes business to offshore jobs

Rebekah Entralgo

Rebekah Entralgo Reporter, ThinkProgress

President Donald Trump was apparently unaware that a provision in his biggest legislative accomplishment encourages corporations to offshore jobs.

Sen. Sherrod Brown (D-OH) spoke with Trump Wednesday night about the closure of at least five General Motors plants, including one assembly plant in Lordstown, Ohio, and filled him in on how the GOP tax bill is partly to blame.

“I reached him last night, he said he wanted to help, I said the first thing you could do is you could take away that tax provision in his tax bill that gives a company a 50 percent off coupon on their taxes,” Brown told CNN’s New Day Thursday. “If you’re producing in Lordstown you pay a 21 percent tax rate, if you move to Mexico you pay a 10.5 percent tax rate, and I told the president to get rid of that tax break that encourages jobs to move overseas.”

The president apparently did not know that was in the tax bill.

It’s difficult to believe that Trump didn’t know a significant result of the GOP tax bill would be a worsening of offshore tax dodging — especially when his own Congressional Budget Office (CBO) said it would. A report in April suggested corporations may be incentivized under the legislation to offshore “tangible assets” like factories and offices, and yes, jobs.

“By locating more tangible assets abroad, a corporation is able to reduce the amount of foreign income that is categorized as GILTI (Global Intangible Low Taxed Income),” the report stated. “Similarly, by locating fewer tangible assets in the United States, a corporation can increase the amount of U.S. income that can be deducted as FDII (Foreign-Derived Intangible Income). Together, the provisions may increase corporations’ incentive to locate tangible assets abroad.”

Those findings echoed previous analysis from non-partisan agencies like like the Institute on Taxation and Economic Policy, which found the Republican Tax Cuts and Jobs Act would make offshore tax dodging even worse than it was before The Center on Budget and Policy Priorities similarly found that the plan is “likely to lead to more outsourcing of U.S. jobs and a larger trade deficit” due to its tax cuts for overseas profits.

Brown had reportedly reached out to the president earlier in the year when the first phase of layoffs at Lordstown occurred, but nothing was done. Now, with a key 2020 re-election campaign on the horizon and a mountain of bad press, Trump seems intent on saving face with voters in the key purple state of Ohio.

Brown told CNN that Trump subsequently expressed an interest in signing onto his American Jobs, American Cars Act that would eliminate the incentive for corporations to move jobs overseas and provide consumers with a $3,500 price deduction on a purchase or five-year lease of a new, American-made car.

“He said he wants to fix it, I take him at his word,” Brown said. “I’m working with his trade representative and we’re going to go to town on it in the next few weeks.”

Only time will tell if the president will follow through on his word to work with Brown, who is exploring a run for president in 2020. Earlier in the week Trump blamed Brown, but not Ohio Republican Sen. Rob Portman, for the GM closures.

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Reposted from Think Progress

Posted In: Allied Approaches

Union Matters

The Call for a General Strike

Richard Cucarese

Richard Cucarese Rapid Response Coordinator, USW Local 4889

It’s been only a few weeks since Labor pushed back against the longest, most punishing government shutdown in recent history, but sadly, over the jubilant cheers of victory, the ominous drumbeats of Congress warring in the trenches could be heard again, leaving 800,00 AFGE members pondering if they’ll be furloughed once more.

President Trump’s decided that the ‘Wall to Nowhere’ will be the hill to die on in this inane battle of attrition, government workers livelihoods be damned.  Keeping this in mind, the ominous question should be how much longer will it be before Trump and the entitled imperialists of D.C. realpolitik turn their sights towards millions of American workers, over 40% of whom, according to CBS News data, are one missed paycheck away from poverty?

As we suffer under the grim reality of decades long wage stagnation, no calls for a realistic minimum wage increase to keep the One Percent’s vulture bankers from our doors, nor a social program of Medicare For All, easing the burden of burgeoning medical costs overrunning the populous meager discretionary incomes, the powers that be seem more than willing to shutter government again, leaving scores unemployed, airport safety and security in perilous shape and costing the taxpayers $3 billion to do so.

And while Congress apparently shows no guilt spending an inconceivable $1.45 trillion dollars for 2018/19, to voluntarily spill blood in every conceivable corner of the globe promoting crony capitalism, strong armed acquisition of natural resources and the continuation of imperialistic follies, the long suffering American worker is left sifting through the rubble, limping through countless miles of crumbling infrastructure, closed factories, failing schools, bankrupting college loan payments, mass shootings and scores of broken dreams, leading to shortened life expectancy, drug overdoses and suicides.

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Let's Talk About Wealth

Let's Talk About Wealth